Article 43


Thursday, February 22, 2007

Alcatel-Lucent 2007 Massacre

The New Alcatel-Lucent Slashing Up To 20,000 Jobs. But none in CHINA.


No layoff plans for China operations after Alcatel-Lucent merger
China Tech Zone
December 14, 2006

Despite the loss of 9,000 jobs globally, the completed Alcatel-Lucent merger will not result in job cuts in China, an official from Alcatel’s Shanghai subsidiary said Monday.

“China has become the world’s largest telecom market with high growth.  Because of the great market demand, we do not have any layoff plans in China,” Cao Yong from Alcatel Shanghai Bell told Interfax.

The new company is expected to generate annual cost savings of approximately EUR 1.4 billion ($1.7 billion) within three years, of which 55 percent comes from a layoff of approximately 9,000 employees, Alcatel and Lucent said in previous announcements before the completion of the merger.

The new company Alcatel-Lucent, with executive offices located in Paris, will have a local presence in 130 countries.  It combines the expertise of the two companies in fixed-line, wireless and converged broadband networking, IP technologies, applications and services.

“The merger of Alcatel and Lucent operations in China will be completed a few months from now,” Cao said.

Alcatel-Lucent started trading on Euronext Paris and the New York Stock Exchange from December 1, 2006 under the new common ticker ‘ALU’.

The new company also released its new logo that consists of an infinity symbol integrating the letters A and L.  The signature color of the new logo is purple, which symbolizes ambition, creativity, wisdom and dignity, Alcatel-Lucent said.

Alcatel and Lucent, after rounds of negotiations, announced in April 2006 that they entered into a merger agreement.  Alcatel will own approximately 60 percent of the combined company, while Lucent will have the remaining 40 percent.

Alcatel-Lucent has annual revenues of approximately EUR 18.6 billion ($24.8 billion) and a market value of EUR 30 billion ($36 billion), making the company the world’s second largest telecom technology group running next to Cisco, Alcatel-Lucent said in an announcement. Source: Interfax, Dec 8 2006



Business Week
February 7, 2007

French unions at telecommunications equipment manufacturer ALCATEL-LUCENT called for a brief strike next week to PROTEST against job cuts, union representatives said Wednesday.

French business magazine L’Expansion reported Tuesday that Alcatel-Lucent planned to cut between 15,000 and 20,000 jobs worldwide, with 10 percent of them in France alone. On its Web site Wednesday, French daily Le Monde put the number of cuts between 10,000 and 12,000 jobs, quoting an unidentified company official.

In response, unions announced plans for a two-hour work stoppage on Feb. 15. They will then consider possible follow-up strikes.

“News reports indicate very alarming figures about the number of job cuts to come,” the CFDT union said in a statement on its Web site. “The CFDT sees a manipulation by management. By circulating more-than-worrisome rumors, it’s preparing minds for catastrophic announcements.”

An Alcatel-Lucent spokesman declined to comment on the reports of job cuts.

The company was formed by the MERGER of France’s Alcatel and U.S.-based Lucent last year in a move to better position themselves in a tough market. Company officials said they expected to save $1.85 billion a year over the next three years by combining the work forces, cutting jobs, and increasing buying power of technology components.

The company issued a profit warning in January and forecast its 2006 revenues at levels similar to 2005, leading to a series of analyst downgrades on the stock.



Telecom equipment provider Alcatel-Lucent could cut up to 20 percent of staff, French weekly l’Expansion reported on Tuesday.

Yahoo News
February 6, 2007

However, unions and analysts cast doubts over the report which would mean the cuts would involve 15,000 to 20,000 employees, SIGNIFICANTLY MORE THAN THE 9,000 PREVIOUSLY ANNOUNCED AS PART OF THE MERGER.

Of the jobs to be cut, l’Expansion said 1,500 to 2,000 would be in France. It quoted industrial and union sources saying 500 of these would be through early retirement.

Union representatives said they expected to meet with management and could receive the first details regarding the cuts as of next Tuesday.

Alcatel declined to comment on the report.

Alcatel-Lucent shares were relatively flat at 9.87 euros at 1607 GMT, which analysts said meant the market was not giving much credence to the report.

Works councils, union representatives and management are due to meet on February 13, 14 and 16 to discuss the job cuts.

“We have not received yet any details on the size of the job cuts,” said Alain Hurstel, head of the European works council for Alcatel-Lucent and a member of the CFDT union.

“But I don’t think these numbers (15,000 to 20,000) are based on reality. If they were, it would mean that the situation was catastrophic.”


FRENCH unions were meeting on Tuesday afternoon to consider whether to strike over previous speculation of heavy job cuts.

Chief Financial Officer Jean-Pascal Beaufret had said in November that the staff cuts would come mainly from redundant positions in sales and support functions which could be shared between the two companies.

“The figure is enormous and so is the range (between the estimates). If that were the case it would be an admission that the merger is a failure,” said Jean-Baptiste Triquet, a representative at Alcatel of the CFDT union.

“Those sorts of job cuts would cause a scandal.”

On January 23, Alcatel Lucent lost over a tenth of its market value after it warned that uncertainty created by its recent merger would hurt sales and profits.

The two companies began operating from December 1 as a combined unit, making it the world’s second-largest supplier of telecoms network and mobile equipment after Cisco Systems Inc. (Nasdaq:CSCO - news).

The group is to publish its full 2006 results on Friday.

Alcatel-Lucent said last month it expected unadjusted fourth-quarter revenues of about 3.87 billion euros ($5 billion) and fourth-quarter operating income of about 120 million euros. It added it expected asset-impairment charges of around 800 million euros for the fourth quarter.

The company said its planned cost savings of at least 600 million euros for 2007 are 200 million euros higher than initially announced.

“I think there is a possibility there could be more job cuts than announced but not on that scale (as mentioned in the report),” one London-based analyst said.


Posted by Elvis on 02/22/07 •
Section News • Section Telecom Underclass
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